What processors flag
Processors and acquiring banks monitor chargeback rates, refund patterns, and sales that do not match the business described in the application. Common concerns include processing payments for another business, sometimes called transaction laundering or factoring, and selling products the account was not approved for. A sudden spike in volume or a run of disputes can also trigger a review, even when the cause is a supplier problem or an attack by stolen cards. Card network rules and the merchant agreement give processors broad room to terminate and hold funds. When a processor ends an account for certain reasons, it may place the business on a card network list that other processors check.
Assembling the business record
Start by reading the merchant agreement, especially sections on reserves, termination, and the process for releasing held funds. Gather invoices, shipping records, customer communications, and refund logs that show the transactions were real. If a third party or a former employee processed charges through your account, document what you know and how you found out. Keep correspondence with the processor in writing, and ask for the specific reasons for termination and any list placement. Avoid opening new accounts with incomplete or inaccurate applications, since that can create a separate fraud problem.
Charting the response
In a first meeting we look at what the processor alleged, how much is being held, and what the agreement allows. We consider whether to dispute the termination, negotiate a release of funds, or seek removal from a network list, which generally has to come through the acquirer that placed it. If law enforcement or a bank investigator has contacted you, we address that first. We also discuss how the business can keep accepting payments in a compliant way while the dispute is pending. The approach depends on whether the processor's concern was a misunderstanding or a pattern that needs correcting.
